Before Nigeria’s independence in 1960, agriculture was the backbone of its economy, reflecting agriculture even in the economic activities of various regions of the country at that time. The famous story of the First Republic records how the resolved regions depend on the income from the northern peanut pyramids, cocoa export receipts, sold western and rubber and palm oil from the east.
With the discovery of commercial crude oil, starting from Olibiri in the present-day Bayersa State in 1956, agriculture was replaced by black gold as a contribution to the national tax pool. Moreover, in terms of total revenue that can be collected, not only did crude oil revenue waste a wave, the Nigerian National Oil Corporation (NNPC) became the three-layer cornerstone entity of the government, seeking redemption with its fiscal forecasts.
But those days, federal, state and local government councils were eagerly waiting for NNPC revenue data, not only retreated to the past, but seemed to have been permanently done. At the monthly meeting of the Federal Account Allocation Commission (FAAC), the focus has shifted to the Federal Inland Tax Services (FIRS), which is the goose that produces golden eggs in fiscal stability and federal well-being.
For those who may not know, the federally shared monthly “cake” is baked by four major entities: NNPC, FIRS, Nigeria Upstream Petroleum Regulatory Commission (NUPRC), formerly known as the Ministry of Petroleum Resources (DPR) and Nigeria Customs Services (NCS).
Among the bodies of the “bakers” under Zacch Addeji, single-handed and total cream of crops accounted for 70% of the total revenue collected and shared by the government in 2024.
In January 2024, FIRS collected taxes that accounted for more than 50% of the agency’s total $1.275 trillion n1275 million of federal accounts. The other three income institutions jointly occupy the balance. While NNPC’s oil revenues resulted in N46.8 billion guilds, NUPRC’s revenues were N46.8 billion guilds, just as Nigerian customs services exchange rate reached N200.7 billion guilds.
In February, FIR’s contribution to the pool increased by 300 billion guilds, and the company brought to the account in January. From the $2.3 trillion accumulated to the account, FIRS’ revenue reached N1.491 trillion, and the collected figure is more than 50% of the total revenue for the month. NNPC contributes only one billion to the swimming pool. NUPRC and NCS contributed 487 billion guilds and 254 billion guilds respectively.
In March, FIRS contributed N1.061 trillion N1.867 trillion in the swimming pool, while in April, federal accounts received N187 trillion from $1.192 trillion N2.192 trillion N187 trillion in revenue. In May, of the N2.324 trillion north shared by the three-tier government, FIR alone contributed 1.571 trillion.
In the last month of the first half of 2024, the “cake” scale about the federal government can be shared in three levels. Of the N3.5 trillion inclusions in federal accounts that month, FIR accounted for N2.841 trillion n2.841 trillion. NNPC’s donations this month are nuprc and NCS, respectively, remitting 402.5 billion guilds and 264 billion guilds respectively.
The upward trajectory of FIRS’ contribution to federal accounts began in the second half of the year. In the federal account in July, it accounted for N3.508 trillion N2.295 trillion, accounting for 65.4% of the total transactions. In August, FAAC’s FIR figure was N1.87 trillion out of N2.7 trillion in the pool. In September, October, November and December, the agency contributed Rs N244 crore (not more than N240 million), in N29 (N29) and N141 crore (N28 crore, respectively) and N141 crore (NN220 million, respectively).
The importance of FIR donations will exclude oil revenues and convert taxes into new “crude oil” The new “crude oil” is already well located in the Federation to (MRS) Oluwatoyin Madein. At the event held in Abuja, she declared: “Taxes are the highest source of income for federal income as of today. So at the FAAC meeting, we eagerly await the FIRS figures as the agency’s performance continues to improve, which brings success to all levels of government.”
In 2024, we will see the contribution of FIR to the FAAC revenue pool, and we will see how it can help the government’s three-tier plans, projects and experience fiscal stability. Apart from having accurate income forecasts, nothing is more like a discipline in finance. If you say you want to spend N10, it means you have to guarantee that N10 will come from somewhere. This commendable collection performance is simultaneously with Addeji’s vision, making taxation a hub for national development.
What’s the difference between FIRs?
The impressive revenue collection released by FIRS is not a product of accident. This is the result of a well-thought-out strategic and process redesign that forms the cornerstone of the agency’s administrative and process reform cocktails under Addeji. One of his main limitations is that if FIR will succeed in the critical mission of its internal tax mobilization, taxpayers must be the center of all policies and initiatives of the agency.
The FIRS Chair summarized the restructuring and repositioning that provided huge revenues for a large amount of revenue and turned it into a customer-centric institution: “We restructured our operations at FIR in such a way that we now effectively fulfill our obligation to assess, collect taxes. We used to have functional tax types, but we have since determined that the only clients we have are taxpayers. So we improved the ways we are relevant to our clients by rescheduling operations based on clients, leveraging their turnover as the basis for dividing them into large, medium and emerging tax groups.”
“We do this to develop our work expertise. Secondly, provide them with a one-stop shop for activities. If you are a big tax group, you just have to go to one office to pay various forms of taxes, including audits and other activities. You don’t have to move from one office to another again.
“We are here to serve taxpayers. Taxpayers are not the armed robbers or criminals we are going to chase. FIR is not a law enforcement organization. We are the ongoing partners. Taxpayers are the trees in our vineyards. The only thing we can do is make sure they are well watered and well-pruned so that they can provide us with a lot of harvest.
As the tax process is streamlined, with high premiums for tax and good overdraft transparency and accountability to remove barriers, the total number is 182,724 new taxpayers, representing 25.3% of taxpayers increase, voluntarily recruiting the agency’s tax management platform, called the Tax Agency’s 2024 Tax Agency, which is the tax scope for the tax scope. It is the tax scope within the tax scope. This not only emphasizes the level of trust that relies on in the new processes placed by the agency. It also makes Addeji’s keen vision make the institution one of the most effective and trustworthy tax authorities in the world.
Mr. Gabriel Idahosa, President of Lagos’ Business and Industry (LCCI), testified that he had witnessed an abnormal transformation at the FIRS. Idaho praised the agency for its reforms aligned with corporate needs, especially the picking out technology’s increasingly use of technology in tax management and the shift of tax personnel from a psychological geographical location that is merely a tax collector to “actively provide services that enhance business operations.”
A key import for unprecedented growth in federal tax revenue is that the non-oil sector accounts for about 75% of total tax revenue. This could obviously be signed, with the government led by President Bola Tinubu pledge to truly diversify the economy from its single-product crude oil. According to Addeji, all the praises for the FIR’s impressive tax collection should be given to President Tinubu. In fact, the president’s two key policies, namely the elimination of fuel subsidies and the unification of the exchange rate Gavea Fillip to the recorded tax revenue collected by the FIRS. What President Tinubu did then would not set these economic fundamentals in the negative consequences of being unbearable in the ICU economy before President Tinubu was in office.
Despite the contributing achievements that the agency has achieved since taking office in September 2023, Addeji has not relied on his oars. He believes that the recorded success so far is just his key focus to increase Nigeria’s tax-to-GDP ratio to 18% over the next three years. He believes this is possible without putting additional burden on taxpayers, but by making the distributor more losses to collect more revenue for the government at all levels, in order to be able to fulfill its obligations to citizens.
For him, if the rising tax trajectory must continue, the minimum is irreducible. He once said, “We can play everything, but if we are going to succeed, we can’t afford it is the data and the advantages.”
It should be said that the agency’s contribution to FAAC has been growing until Addeji leads. However, Addeji’s arrival greatly improved quantum through the scale of internal administrative and process reforms he introduced, thus simplifying tax revenue.
For 2025, FIRS aims to collect N25.2 trillion US dollars in taxes, which means the government has three layers of money to meet its needs. This is another reason why the National Assembly should not currently oppose the tax reform bill. If the FIR can publish these huge records in a short time, break its own records and set higher goals and goals, then a modern and purpose-friendly tax system can only add momentum to the domestic income mobilization task provided to the FIR.
For those who ask questions: Where does FIR tax revenue come from? The answer is: The FAAC meeting held by the Federal, State and Local Government Council in Abuja and the corresponding shared money, about 70% of the money comes from tax revenues FIF collects every month from taxpayers.
For the keen observer, President Tinubu deserves credit for the huge jump in shareable FAAC allocations, which continues to swing upward since his tenure. Now, all states have collected almost three times as ITU allocations before the Tinubu government arrived. Due to the president’s brave leadership, every month, the managers at the third floor smiled at the bank.
Adekanmbi is a special media advisor to the Executive Chairman of the Federal Inland Tax Services (FIRS).
